According Bloomberg, “U.S. authorities in Puerto Rico are investigating allegations that a former UBS AG broker improperly advised clients to borrow money to make investments [.]” The broker was put on leave in October while UBS examined the loans. Following the review, the broker was terminated.
Countless investors have suffered significant losses as a result of purchasing UBS Puerto Rico closed-end Funds. The Funds invested heavily in Puerto Rico municipal debt. Unfortunately, Puerto Rico has fallen on hard times. According to Bloomberg, “Puerto Rico obligations lost 20.5% last year, the steepest drop since at least 1999, Standard & Poor’s data show.”
Separate reports indicate the broker under investigation was Jose G. Ramirez Jr. According to Ramirez’s BrokerCheck he is listed as the broker of record on more than 35 customer complaints relevant to the time he was working at UBS Financial Services. He was employed by UBS from 03/1997 – 02/2014.
Broker dealers have a fiduciary duty to perform adequate due diligence on investment recommendations, especially when recommending complex products such as closed-end bond funds. Taking out loans to increase investment capital exposes clients to additional and often unnecessary risks. While authorities have not accused UBS of wrongdoing, The White Law Group continues to investigate the liability of the firm for negligent supervision of their employees.
When a broker makes unsuitable investment recommendations and/or fails to perform adequate due diligence on investment recommendations, the brokerage firm may be liable for negligent supervision and responsible for investment losses.
If you invested in a UBS Puerto Rico Fund (particularly on margin) and would like to speak to a securities attorney about recovering your investment losses through a FINRA dispute resolution claim, please call The White Law Group at 312-238-9650 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, please visit our website at www.WhiteSecuritiesLaw.com.